ECB chief expected to keep door open to further monetary action

The European Central Bank is expected to keep the door open to further monetary stimulus measures to help fire up the eurozone economy and boost inflation in a meeting Thursday.

Analysts are not expecting ECB chief Mario Draghi to unveil any new monetary measures. The bank announced a package of measures in both December and March aimed at spurring both inflation and economic growth in the 19-member currency bloc.

Instead, the ECB chief is likely to hit back at German-led criticism of the bank's decision at its March meeting to cut its benchmark refinancing rate for the first time to zero and to lower the deposit rate deeper into negative territory.

Draghi is also likely to face a series of questions at his press conference Thursday about whether the bank is planning to deploy any further unorthodox measures.

In particular, Draghi could address rumours over the ECB using so-called helicopter money, which would see the bank disburse money directly to households to head off the threat of deflation and boost economic growth.

Analysts say the recent slump in oil prices and the tepid inflation rate could force the ECB to follow up its recent batch of stimulus measures with fresh monetary action in the coming months.

Standing at zero in March, consumer prices are well below the ECB's annual inflation target of just under 2 per cent.

There are also other issues looming large over the 25 members of the ECB's governing council, including the countdown to the British referendum on European Union membership in June.

Global financial markets are also facing up to the threat of a re-emergence of the Greek financial crisis, as Athens and its creditors struggle to hammer out a new deal to head off the risk of Greece's bailout unravelling.

Last update: Fri, 24/06/2016 - 08:49

More from Europe

Russia drops request for navy to use Spanish port under NATO pressure

Russia has withdrawn its request for warships to use the Spanish port of Ceuta on the Mediterranean Sea, the Russian...

Conservationists slam Norway at whaling conference

Conservationist groups Wednesday criticized an ongoing meeting of the International Whaling Commission (IWC) for...

EU queries Italy spending plans; Renzi threatens retaliatory veto

The European Commission has asked Italy to explain its spendthrift 2017 budget plans, it confirmed Wednesday, hours...

Calais migrant camp empty, as official announces "end of the Jungle"

All the migrants at a camp near the northern French port city of Calais have left, the official heading the Pas de...

Migrant rescues close to Libya pose security risk, EU agency says

Migrants adrift in the Mediterranean are being picked up "closer and closer" to Libyan waters, exposing rescue...